Argentine weather promotes overnight grain rally.

Grain futures are higher this morning as the continual disappointment in forecasts that Argentina would receive bountiful rains in the country's southern half continues to come up short. Rains have occurred in some areas of southern Brazil and Argentina in the past five days, but coverage has been just over half. At the same time, over half the crop has seen nothing. So March remains short across southern and central Argentina, which has helped produce strength in soybean meal today, elevating spot beans back over 1050.

Tunisia is now shopping for wheat and accepting CIF offers for delivery from February 25th through April 10. The market anticipates a sale being completed with E European wheat. North African rainfall is much improved from recent years, with January totals of 1-5.5″. This will go a long way toward producing a larger 2025 North African wheat harvest.

RFK Junior will head to the Senate today for confirmation on his Secretary of Health and Human Services nomination. Responses to vaccine and food questions will be key. As HHS Secretary, he will influence over 80% of the US food supply. His outspoken stances on pesticides, processed foods, and oils from seeds like soybeans have raised Senate concerns.

Weather forecasts have curtailed 10-day rainfall amounts for Argentina and Southern Brazil; soybean meal leads the rally even as cash basis levels we can in the US in March-May spread that pushes out to near full carry. Model forecasts have been poorly tracking forecasted thunderstorms from deferred forecasts into nearby realities. Meanwhile, the Brazilian soybean harvest is slow to start because crops are now trying to find breaks in rainfall. It’s anticipated that it’ll be another 10-14 days before that harvest can reach high gear. This will be a problem for the Safrinha corn crop, which will get planted on time and cause future risks for world corn supplies in the second quarter.

Another sharply higher session Tuesday for live and feeder cattle. February cattle picked up $3 to end at a record high of $208.55. Meanwhile, April cattle also posted the best gains of $3.45 and now are above $ 207. June cattle finished over $ 201. The January feeder cattle contract picked up $2.10, closing just under $282. Feedlots are again looking to sell at sharply higher prices this week as strength in the beef market signals the Packer's intentions. Box beef had a choice, gaining $2.37 to $332.45, while select rose $1.41 to trade at $ 321.96. Compared to a year ago, both values are $ 36 higher and are at record prices for late January.

February live cattle prices have pushed higher by almost $10 in five days, repeating the setting of record highs. The market is overbought, and funds are likely holding a record-large position in cattle now and over the record of April 2019. Price volatility will remain high with the market outlook turning to neutral. Volatility will be high, reminiscent of Monday, when feeder cattle dropped $6.00 from their highs in little over an hour.